Thursday, March 27, 1997

Texas on edge of property tax revolt, Craddick says

Tax relief was the hot topic this week as 2,300 cattle raisers and members of allied industries attended the 120th annual convention of the Texas and Southwestern Cattle Raisers Association in Fort Worth.

Ranchers are struggling to recover from an extended period of drought, low cattle prices, and high feed costs, said Chaunce Thompson, Jr., a Breckenridge cattleman and TSCRA president.

TSCRA is a livestock organization based in Fort Worth with more than 14,000 members who own or control almost 2 million cattle on millions of acres of agricultural property in both Texas and Oklahoma.

As property owners, they fund a major portion of the educational costs for Texas school children through their property taxes.

It is a tax system that is unfairly weighted and must be changed, said State Rep. Tom Craddick of Midland, who spoke to TSCRA's Legislative and and Tax Committee on Gov. Geporge W. Bush's tax plan and bill, which Craddick is co-sponsoring.

Meanwhile, U.S. Sen. Kay Bailey Hutchinson of Texas told cattle raisers that tax cuts also are the highest priority at the national level.

"The average American family pays 50 percent of its income in taxes," she said. "The first taxes we will work to cut is capital gains; they are the most important to the economy. We have to take the shackles of overregulation, overtaxation, and overlitigation off of business."

Craddick said the shackles should also be removed from Texas property owners.

"Texas is the only state in the United States that does not have a personal income tax or a statewide property tax," Craddick said.

He noted the size of government.

"Our state budget has doubled since 1988. Your property tax on the local level have doubled in the last 10 years; the state projects they will double again in the next five years unless we make some changes," Craddick noted.

Craddick said Texans are growing weary of this.

"We think we're on the edge of a property tax revolt," Craddick said. "We're not in a crisis now, but I think we're facing one in the future."

Billions needed in budget

Craddick said that $9.5 billion in local property taxes is spent each year for schools, and the annual state budget is $80 billion.

"We need to set a base in this state that we're going to fund at the state level, and allow individual districts to decide by an election whether they want to increase funding at the local level," Craddick said.

"Today the state pays for only 43 percent of the education at the state level," he said.

Proposals currently being considered call for a ratio of 80 percent state and 20 percent local.

Suggested sources of revenue to replace property taxes include:

-- A statewide property tax which would be capped by the constitution;

-- Dedication of 100 percent of the money raises by the Texas Lottery to education instead of the current 60 percent; and

-- A freeze on hiring state employees.

One thing is clear, agriculture and rural property owners cannot continue to shoulder the burden of property taxes at the current magnitude.